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Content marketing is attracting its share of marketers' budgets -- 12% on average -- and more than half of marketers plan to spend even more in the coming year, according to a survey Ad Age conducted in late 2012 of nearly 600 marketers. Yet, it's clear most marketers are struggling with some pretty basic questions: Who should be the "boss" of content? How much should be spent on content marketing? Is it effective?

"More and more clients and brands are realizing they need content to be part of the checklist, but they haven't figured out how or why," said Kyle Monson, chief creative and founding partner at Knock Twice, a content strategy and PR agency. "Clients come to me saying they need a content campaign -- that's a solution. When we ask, "What's the problem?,' often it's that every other CMO has one."

Just What Is Content Marketing?

By its strictest definition, content marketing is the creation and sharing of content. It lives on owned or earned media—if it's paid, it's advertising. And the goal is to attract and engage consumers.

Content marketing "dates back to companies printing up newsletters and making film strips," said Rebecca Lieb, an analyst with Altimeter Group. "It's become popular now because of digital distribution."

One of the biggest misconceptions about content marketing is that it's free. Usually there are costs associated with creating, producing and distributing content, as well as personnel.

Marketers polled by Ad Age said they're using everything from social media and live events to targeted microsites and branded entertainment for content marketing.

"One of the gold standards is Red Bull. They had a guy skydive from space, and it was a PR thing, but it was also great content," said Kyle Monson, chief creative and founding partner at Knock Twice, a content strategy and PR agency. "I guarantee the Red Bull space jump has spawned many, many PowerPoint decks and pitches."

-- Cotton Delo

Likewise, when it's not clear why a marketer wants to add a content-focused campaign to the mix, it can be next to impossible to determine any sort of meaningful ROI. "We talk to clients all the time who want to establish ROI for a social-media effort that's been running for years," Mr. Monson said. "We'll be in the same boat soon with content marketing."

Just 8% of marketers told Ad Age they are "very satisfied" with their ability to understand the effectiveness of content marketing; 48% say they are "somewhat satisfied."

"There's very little ability to attribute lift in business to content-marketing activities," said one survey taker. "It's difficult to "test and learn' this stuff if you want to create something really relevant and engaging. Big leaps are required but difficult to sell in."

Jeff Jones, CMO at Target, said he agreed, and pointed to the success of A Bull's-eye View. The year-old online magazine attracts "well north" of 100,000 unique visitors. "We understand the basic things. ... But we don't have a single metric yet, and we don't have history to know its predictive nature.

"It's hard," said Mr. Jones. "It's easy to talk about buzzwords but hard to operationalize what this really means. We're in the early days of a long journey."

It's increasingly important that content marketing be embraced at the top, and that someone is charged with owning it. Rebecca Lieb, a digital advertising and media analyst with Altimeter Group, said that companies are beginning to realize they need a holistic view across channels, which merits some sort of "boss of content."

"You have to have people whose primary job is to create and strategize and monetize content," said Ms. Lieb, also the author of "Content Marketing: Think Like a Publisher -- How to Use Content to Market Online and in Social Media."

Just 30% of marketers say they spend their content-creation budget on internal staffing. Yet, on average, marketers say only 30% of content creation is handled by third-party partners or suppliers. That's leaving plenty of folks internally to pick up the slack, adding content-production responsibilities to existing workloads.

"We struggle with content creation and marketing, because people see this as something that they have to do over and above their current job responsibilities or [Key Performance Indicators]," said another survey-taker. "It gets pushed to the side as people have to carve out time from their current work responsibilities. It's a problem with the perception of this concept."

As a result, some companies are setting their sights on journalists. For example, Coca-Cola, which recently reimagined its company website as a corporate content hub dubbed Journey, has added a former TV news journalist and a senior writer to its ranks. Much like any editorial staff, the team meets biweekly to brainstorm content for the weeks and months ahead.

"I've really remade my team around being content producers and syndicators and sourcers," said Ashley Brown, director-digital communication and social media. "We're looking for that journalism background for the team now and going forward."

Another challenge, marketers say, is determining the right way to fund and distribute content. According to Ad Age's survey, 55% of marketers will increase content-marketing budgets in 2013. But the vast majority of survey respondents rely on owned-and-earned channels to distribute content, rather than paid channels. Less than half of marketers report they have dedicated budgets for content production and distribution.

"The biggest challenge is distribution and how you get the eyeballs. ... But if there's not a big budget or some kind of network deal, you can produce great content and no one sees it, because the space is getting crowded," said Crystal Worthem, manager of Ford brand content and alliances marketing.

Ms. Worthem She said Ford is still learning the best way to distribute content and has "run the gamut" from pure viral to heavy paid to working with a network such as NBC. "With a younger audience, it's more likely to get viral spread. Something that requires more-sophisticated audiences, they're in more paid spaces."